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QVCA reported Q3 results after the market closed yesterday. Top line growth (+4% const. currency) was in line with our estimates, but Adjusted OIBDA growth of +1% was 2% below our estimate. While Q3 was a good quarter, it represented a deceleration from Q2 figures which saw +5% top line growth and OIBDA growth by 7%.

Every day we send out Aram’s Hardlines Highlights. We have been doing so since December 14th. But these are not simply newsy headlines. Each one includes a useful analytic. We realize that it is hard to consume a daily research product, so we have compiled this Daily Monthly (don’t ask) in order to aggregate the 21 analytics we covered during the month of October.

Since we initiated coverage of QVCA with an Outperform rating on September 21, 2015, we have heard pushback on two fronts. The first is that QVC’s customers are aging. The second is that QVC is overly dependent on linear TV trends.

Initiate QVCA with Outperform and $35 target. We value QVC using FCF since the business acts like an annuity that will compound FCF per share at 10%+ over time. Slow and steady can be better than explosive growth that fails to sustain. Our target implies a 7% ’16 FCF yield.